The government plans to raise $500 million through help packages from the World Bank, the Asian Development Bank and loans from local banks to transform the power sector into a commercially viable, competitive and profitable entity, Javed Burki, secretary of economic affairs at the Finance Ministry, told MEED on 5 March.

Talks are currently under way with the two international banks for the financing of the restructuring process aimed at reducing losses and increasing output and efficiency of the Water and Power Development Authority (WAPDA) and the Karachi Electric Supply Corporation (KESC).

Burki said WAPDA will be divided into eight distribution, three generation and one transmission unit which will pave the way for its privatisation. 'WAPDA's finance committee is in talks with local banks to arrange loans, while the options of a bond issue and increasing the tariffs may also be exercised to raise the funds,' he said.

WAPDA's line losses, estimated at over 20 per cent are some of the highest in the world and are resulting in huge revenue losses. 'WAPDA was not created to produce thermal power. Its job was to build and run irrigation dams and canals. Somehow along the way, it started doing something [producing power] it was not structured to do. We want to restructure it so that it can play its original role,' Burki said.